In case you are hunting for a new property in the market, one viable option to explore is Pag-IBIG Fund’s list of foreclosed properties. This list of properties offers distinct advantages being in line with market rates and a well-established route to acquiring properties in the Philippines.
Through its website, Pag-IBIG Fund lists down a list of foreclosed properties for scheduled bids for interested parties.
Although the steps are relatively straightforward, it is understandable for first-time bidders to feel confused about getting them right in their attempt. We’re hoping this article helps them proceed with their bid attempts with more ease.
1. Review the list of foreclosed properties for bidding
But before you make your bids, you have to identify which property or properties you have an eye on acquiring. Visit the Pag-IBIG Fund’s Acquired Assets page and look for the Schedule of Public Auctions section. Listings are grouped according to a city or provincial location.
One foreclosed property up for bidding is listed per row.
- Item number – property counter used for easy reference when relating to the specific list of properties.
- Property number – reference number to refer to the specific property.
- Property location – the address of the property, usually specific down to phase, lot, and block number in a barangay, city, or municipality.
- Type – the type of property.
- TCT – Transfer Certificate of Title.
- Lot area – the size of the area of a lot of property in square meters. Certain properties such as condominium units don’t sit on a particular lot so this field has zero value.
- Floor area – the size of the area of the property in square meters.
- Minimum bid – the lowest value of bid allowed for this part in Philippine pesos.
- Appraisal date – the date on which the property was inspected and assessed its value.
2. Perform due diligence on the buyer
Since data provided in this document is limited — price, property type, and floor area — it’s best to make due diligence once you have a property or properties you have in mind. This includes visiting the property itself and verifying the lot and floor area, evaluating its accessibility and environment in the neighborhood. For example, answer these questions: is it near the highway and easy to access through public transport, or is the area easily flooded when it rains?
One caveat that commonly appears in Pag-IBIG Fund auctioned property listings is that they are “as is where is”. This means that properties are being sold with the buyer getting everything that comes with a property, in its present condition, good or bad. A leaking roof or rowdy neighborhood comes with the cost.
Another word of advice to prospective buyers: do not bid on properties that are occupied. Occupied properties can get complicated especially if occupants are unwilling to move out of the house.
Once you are certain that the property fits your desired conditions and financial consideration, it is then the right time to proceed with the bidding.
Note that there is a cutoff date on which you should come up with a decision and provide certain requirements.
In the example above, the date of bidding is September 20, 2017 for Cavite area listed properties. This means that you must have inspected the property and decided whether to proceed or not prior to that bidding day.
3. Prepare documentation
Interested bidders are then invited to formalize their desire to acquire certain properties by providing the following requirements:
- Filled out OFFER TO BID (HQP-AAF-103) (DOWNLOAD HERE), stating details of the property (TCT, location, phase, block, lot number, etc), along with details about the bidder (name, address, SSS, Pag-IBIG, and TIN numbers, employer and address, etc). You may use PDFfiller tool to fill out data before printing. Print two copies are once done.
- Bidder’s Bond. As a bidder, you need to prepare a bidder’s bond which is equivalent to 10% of your bid amount for the property you desire to acquire. For example, if the minimum bid in the property item number 143 is P176,983.26, you may want to place your bid at P250,000 hoping nobody bids higher than that amount. The computed amount for bidder’s bond is as follows:Bidder’s bond = P250,000 x 10% = P25,000The bidder’s bond can be in cash or a manager’s cheque from any commercial bank and made out to Pag-IBIG Fund. This amount shall be returned back to the non-winning bidder or serve as a downpayment for the winning bidder for the property once the bidding process has concluded.
- Envelope. This sealed envelope shall contain the filled-out OFFER TO BID and Bidder’s Bond.
The Bidder’s Bond can be paid prior to the date of bidding, depending on the location. Typically this can be done at HDMF offices or member services branches. Just confirm with the Pag-IBIG Fund office supervising the foreclosed property bidding.
4. Attend the scheduled bidding day. Interested parties are encouraged to attend the day of the bid at a pre-announced venue and time. Should you, the bidder, be unable to attend, you can appoint a representative. If so, get the following documentation:
- Special power of attorney (DOWNLOAD HERE). This filled-out document shall include details of the bidder and representative, along with the scheduled time, day, and venue of the bid, affixing the signature of both the notary public and the bidder and the bidder’s spouse, if applicable.
- Acknowledgment. A notary public’s corresponding acknowledgment (with signature and notarial seal) of such appointment of a representative.
5. Register at the day of bidding. On the day of bidding, have your presence acknowledged by registering in the entrance counter.
6. Announcement of winning bids. The bidder who offers the highest bid as determined by the Bidder’s Bond shall be declared the winner. But there are cases when the highest bidding isn’t even the case when selecting winning bids.
- In case there is only one bid brought forward, the bid is automatically declared the winner.
- In case two or more bidders have the exact amount of bids, determining the winner can be done through the following process:
(a) Mode of payment – the bidder who offers cash payment gets higher priority over one who offers on an installment basis.
(b) Toss a coin – if there are only two tied highest bids.
(c) Time of registration of bids – The bidder whose bid was brought forward earlier is declared the winner.
7. If you won the bid. Your Bidder’s Bond worth 10% of your proposed bid will automatically be considered your downpayment of the property. The remaining 90% of the balance can be paid (unless you won the bid through a tie-breaker and won via the mode of payment) through the following options:
- Cash – on which the approved purchase price shall be paid not later than 30 days after the receipt of notice of award.
- Short-term installment – on which the approved purchase price and interest shall be paid in equal monthly installments not to exceed 12 months.
- Long-term installment – on which the approved purchase price and interest shall be paid in form of monthly amortization for up to 30 years with the following considerations:(a) Loan approval and terms shall be subject to eligibility requirements under Pag-IBIG End-User Home Financing Program guidelines.
(b) The loan amount shall be the bidder’s offer, net of the 10% downpayment.
(c) If the loan application has been disapproved, the 10% Bidder’s Bond shall be forfeited in favor of Pag-IBIG Fund.
(d) The buyer shall be required to file for Pag-IBIG Fund loan application and complete documentary requirements and pay incidental fees within 30 days of receipt of Notice of Approval of Sale: processing fee, equity (if applicable), one year advance in insurance premiums for fire and allied perils.
(e) If the Bidder’s Bond is higher than the assessed value of the property, the excess amount shall be treated as equity. It shall be paid by the buyer within 30 days upon receipt of the Notice of Loan Approval.
(f) Original borrowers who wish to join the public auction shall not be allowed to avail of housing loans and instead permitted only to bid on a cash or installment basis.
- If there was no mentioned preferred payment mode, the default mode shall be long-term installment. Otherwise, the buyer enjoys certain discounts for cash or short-term payment option:(a) Cash – 20% discount
(b) Short-term installment – 10% discount
(c) Long-term installment – No discount
8. If you lost the bid. If someone else offered a higher bid in the public auction, your Bidder’s Bond shall be returned to you, together with an acknowledgment receipt soon as a winning bidder has been declared.
9. If the winning bidder fails to comply with conditions. In case the winning bidder fails or refuses to purchase the property, or fails to comply with payment conditions, he or she loses the right as winning bidder and the 10% Bidder’s Bond shall be forfeited in favor of Pag-IBIG Fund.
Bidding for foreclosed properties in Pag-IBIG provides an excellent opportunity to gauge the market value of a certain location, even when you don’t proceed to make a bid or lose out in an auction. However, proper research trumps everything else and helps guarantee a property worth investing in. Failure to do so might lead to forfeiture of Bidder’s Bond especially when the winning bid realizes the disadvantages and hazards associated with the property in question and backs off from a deal.